FTC Launches Inquiry Into Supply Chain Disruption

FTC has ordered Walmart WMT , Amazon AMZN , Kroger KR and other large wholesalers, retailers and suppliers to submit information as to what is causing supply chain disruptions and how these disruptions are causing serious and ongoing hardships for consumers and harming competition in the United States economy.

The FTC issued the orders to Walmart, Amazon.com, Kroger Co., C&S Wholesale Grocers, Associated Wholesale Grocers, McLane Co., Procter & Gamble Co. PG , Tyson Foods TSN , and Kraft Heinz Co KHC . The companies have 45 days from the day they received the order to respond.

The FTC chair Lina M. Khan states that “supply chains are upending the provision and delivery of a wide array of goods, ranging from computer chips and medicines to meat and lumber”. She is hopeful that the FTC can shed light on market conditions and business practices that may have worsened these disruptions or led to asymmetric effects.

In addition, the FTC has asked for “voluntary comments” that could “provide an opportunity for market participants to surface additional issues and examples of how supply chain disruption is affecting competition”.

The FTC said that this request is not part of any law-enforcement action.

On the same day as this order was issued, President Joe Biden met with major retailers such as Walmart, Best Buy BBY , Kroger, Food Lion and other major retailers and grocers to discuss the supply issues. The cost of goods measured by the consumer price index rose 6.2% last month from a year earlier. It is the fastest increase since 1990. Many economists ascribe to rise to unprecedented consumer demand caused by the pandemic store closures. The administration also addressed the high cost of lumber.


POSTSCRIPT: There is some help to break the log-jam at ports. The transportation department said it would extend the flexibility on the number of hours truck drivers can drive through the end of February. The Federal Maritime Commission will allow users of terminal gates at the ports to be exempted from paying fees for night and weekend pick-up of containers. However, there are still long delays at Los Angeles and Long Beach ports. Bloomberg reports that in the global supply chain an estimated 3 million containers are idling on ships queued up at posts around the world. Wow!

The Tycoon Herald